Solar Investment Tax Credits ride the $700 Billion Bailout Wake

With all the focus on the Bailout, I must admit thinking the Renewable Energy ITC extensions would have to wait until next year. After the U.S. Senate passed a revised bill laden with tax extensions and other unrelated legislation, the U.S. House of Representatives passed the “Rescue Sweetened With Tax Incentives” (by Cecilia Kang of the Washington Post).

While the elimination of the $2000 cap on residential photovoltaic installations is a fantastic boost for distributed generation, wealthier families with higher annual electricity consumption will be the first to benefit. As a solar integrator pointed out to me today, the residential market will be frozen in the United States until the residential Solar ITC becomes effective January 1, 2009.

The Solar Electric Power Association (SEPA) was also quick on the press release with the “SEPA Statement on Historic 8-Year Solar Tax Credit Extension”. Hailing “the removal of a prohibition that previously prevented electric utilities from taking advantage of the credit”, this significant change to the Solar ITC has received little scrutiny. Are monopolistic Electric Utilities poised to become change agents to stave off global warming by investing in large scale renewable energy, solar, and photovoltaic power plants? Will they play fair with independent renewable energy power producers connecting to their grids? Why were no concessions sought from Utilities? How about Utilities agreeing to new photovoltaic residential metering rules that pay for excess electricity generation (please see AB 1920: California bill goes beyond Net Metering) in exchange for receiving the benefit of the ITC?

I am hoping the passage of the Solar ITC will place a natural limit on discussions about ITC politics at Solar Power International 2008 next week in San Diego, California USA. Wishful thinking? As last year, I believe the US and worldwide economy should be the prime topic of conversation. The credit crunch may slow down utility renewable energy investments and have already impacted production expansions in the photovoltaic industry. On the residential front, will families invest in solar electric power even when they have opted not to purchase new cars?